Zhan Ye defends all this in his lecture by likening it to Las Vegas. He points out that gambling takes advantage of a human weakness, but gambling never goes out of fashion; the Chinese free-to-play games take advantage of another human weakness -- the desire to dominate other people -- and that will never go out of fashion either.
Leaving aside the grotesque cynicism of pandering to the kind of people who enjoy oppressing others, I have three responses:
As if all this weren't depressing enough, Mr. Ye explains how game designers can make money out of hate and humiliation in social environments:
"Conflicts are good. Conflicts make the game world more energetic and live. More importantly, conflicts trigger emotions. When people are emotionally unstable, they are more likely to make purchases."
This reminds me of Baron's Theorem from Raph Koster's laws of online world design:
"Hate is good. This is because conflict drives the formation of social bonds and thus of communities. It is an engine that brings players closer together."
Personally I think Baron's Theorem should be called "Adolf Hitler's Theorem," because Hitler had the same insight several decades earlier. It certainly worked for him. Germany was a vibrant, diverse nation before Hitler got hold of it and welded it into a close-knit, efficient hate machine.
Even Hitler didn't use hate to sell widgets, though. Not content with fomenting conflict, the game designers Mr. Ye refers to have also invented an item they can sell to players to abuse and humiliate one another:
"[There is a] virtual item called "little trumpet," used to curse other gamers. The curse will be broadcasted to all gamers (in the same zone). A public humiliation tool. Sold a lot."
Is this what game design has come to? Creating things to sell players that enable them to be cruel to each other? Looking for opportunities to make money out of emotional instability? Bullying is not a joke, and it is not make-believe. It causes misery and pain and it can and does drive people to suicide. And I'm revolted at the idea that a game designer would promote it for profit.
Bad behavior is hardly confined to free-to-play games, of course; there are parts of Xbox Live that are plenty nasty too. But we don't have to create in-game incentives to promote it. And, incidentally, telling players to simply log off if they don't like it is not acceptable; that puts the burden on the victim. It's like telling someone who gets obscene phone calls to just get rid of their telephone.
I know online games don't have to be like this. Club Penguin isn't. FarmVille isn't. It's perfectly possible to create a Club Penguin for adults, if we want to. To be fair to Mr. Ye, he issued a disclaimer at the beginning of his lecture to the effect that doesn't endorse these practices, he merely reports them. But it's disturbing to think that the Chinese game design community regards this kind of thing as desirable. Nor is it limited to China, if Baron's "Hate is Good" Theorem is generally accepted by the MMOG community.
Avoiding hate doesn't mean we have to get rid of competition. A close, hard-fought game is a fun one. When the 49ers beat the Broncos in the closing seconds, I cheer. But that doesn't mean that I hate the Broncos or their fans. I don't have any ill-will towards the Broncos at all. If you watch American football players, they'll knock each other down with incredible violence... and then they'll help each other back up. There's no hate there so long as nobody is cheating. Boxers, fencers, and wrestlers don't hate their opponents. Hatred clouds judgment and inhibits peak performance.
There's a social convention called sportsmanship that is designed to keep competition on the right side of the line. I realize that the concept of sportsmanship sounds like something out of the 19th century; perhaps it has no place in the tough, nasty world of online gaming. But when competition turns to hatred, you have gone too far. If you are building games that foster tribalism and hatred and cruelty, you are doing evil.
There is no such thing as artificial hatred. All hate is real. And we should not be selling it.